What is the MOST important Making Money 101 tool of all?

I don’t often talk about Making Money 101 on this blog; perhaps a little too much for some, but certainly not as much as other personal finance writers …

… there’s a good reason: I didn’t MM101 my way to $7 million in 7 years, but without at least SOME of it, I would not have got there.

I’ll tell you which MM101 tool was the most important to me, but first I’d like to hear your opinion, please vote AND leave a comment?!

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22 thoughts on “What is the MOST important Making Money 101 tool of all?

  1. For me, saving 15% of gross (or even net) salary is the most important, as this solves two problems:

    1) It gives you a sense of pride to see a growing ‘pot’ of money.

    2) It ‘forces’ you into a more frugal / less wasteful way of life. It would be so easy to spend that 15% (or whatever it is) on unnecessary things.

    I personally save 20% of my net salary, as I prefer not to think about gross salary because of deductions, and I’m only paying 20% tax here in the UK! (plus 11% NI, plus 9% Student Loan…)

    I really enjoy the simple ‘rules’ you’ve laid out here – looking at net worth, saving 15% (more if you earn a higher salary), 75/20/5 % rules, but for me, saving is the most important.

  2. As with James, the saving 15% of gross was the most important. The reason why is it forced me to live frugally and delay gratifications (if I had less money, I had to find ways to take care of things).

    We’re a little nuts right now and “saving” 45% right now, but that’s because we’re trying to “clear the deck” of old unsecured debts. My wife is a stay-at-home mom and our second child is on the way in August, so we really need to get our foundation good so we can move onto Money Making 201 (we’re earning more than 67% of the US and aiming for at least 75% by the end of next year).

  3. Isn’t saving “X” % of your salary per month a budget? It’s still a pre-planned system that is established before the month begins(or year, or 15 years).

  4. I chose “delayed gratification”. It’s this general concept that’s prevents me from buying a lamborghini right now and “delaying” the purchase until I have the appropriate net worth.

  5. I Like using the Save 50% of found money , as it normally is a larger amount ,but still like to save the 15 to 20% of net earnings.But most important to me is the 50% of found money.I like to be able to put away large chunks of cash whenever it comes my way.

  6. The more I think about it, the more I feel that debt repayment is the most important. If you haven’t done that, you can’t really save much at all.

    And I mean repaying bad debt (credit card, etc).

  7. I think you have two important elements identified in the poll.

    1. Save 15%….and invest it, of course

    2. Delayed gratification

  8. Delayed Gratification – It helps you think over the potential purchase. You may want it now but after a while, the “want” is gone. It will also help differentiate the “needs” from the “wants”.

  9. @Scott, I just don’t plan my expenses to the penny- How much on this , how much on that….etc.

    My expenses and wants are all in the 70%. I don’t have a structured amount that I spend on gasoline or toothpaste, lol

  10. The main thing for me has been learning to say NO to people.
    I used to lend people money or help them out usually to my detriment.
    I also learned to declutter my life a bit and live within my means.

  11. I selected “live frugally,” but after some thought, none of the choices exemplified what I believe are the best tools to successfully complete MM101.

    Here are several MM101 tools that I like best:
    1) Spend Less Than You Make. It’s both simple and effective.
    2) Set Goals. This can be short-term, i.e., a monthly budget, or longer-term, such as paying off a debt or saving X amount of money for MM201 activities.
    3) Acquire skills that will enable your MM201 activity to be sucessful. For instance, if you intend to make your fortune in the restaurant business, then I would recommend you work in restaurants during MM101 even if you can make more money at a different type of job.

  12. @ MoneyMonk – THAT’S the one I was hoping to hear … spending “too much on toothpaste” will kill you! 😛

    @ Jeff – Great list; thanks.

    Still hoping to hear a lot more ideas from a lot more people …

  13. Yeah, I know what you mean MoneyMonk. I do the exact same thing. I guess when I hear the word budget, to me I no longer think of it as every single allocation for every single penny earned written down exactly.

    I think setting yourself up on an automatic % of your salary to be saved automatically every month and then living off the rest accomplishes the “goal” of a budget without having to write down all the little details and is in itself a type of ‘budget’.

    I figure writing down all the details each month for about the first 3 months or so until you know for sure where your money goes(and where you could find more money to save if you are losing it frivolously, hence increase the automatic % of savings)is sufficient, then one can implement an auto savings program, put it on auto drive and get on to living and enjoying life!

  14. Without delayed gratification, why would we save money at all? We’d just live paycheck to paycheck and hope we never…didn’t get a paycheck!

  15. From the list, I would pick delayed gratification.

    If I had to chose just one conceptual idea for building wealth it would be a willingness to take risks (preferably ones that you at least think you understand and can have reasonable expectations of managing to some degree). Nobody ever got rich putting money into a savnings account.

    There are of course many others as well.


  16. I’d say that setting goals has been most important for me. Without goals I have no reason to save, cut expenses or delay gratification

  17. I think the most important tool isn’t in the list- I nominate self-control – restraint exercised over one’s own impulses, emotions, or desires.

    Self control allows you to delay gratification resisting the instant gratification of credit. Self-control let’s you live frugally so that you can spend less than you earn. How could you save 15% or 50% of your found money without a lot of self-control? You also need self-control to prevent financial disasters like: selling stocks at the bottom of a down market, buying properties at the height of a bubble, or just spending too much!

    -Rick Francis

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